The Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) and the new tariff policy introduced by U.S. President Donald Trump are expected to reshape Indonesia’s export landscape, encouraging greater diversification.
Exports to the European Union could expand significantly, while shipments to the United States are unlikely to contract in the near term.
Still, Indonesia’s trade dynamics with its two key partners diverge. The U.S. is Indonesia’s second-largest export destination after China, with bilateral trade reaching US$42.9 billion in 2024.
Indonesia shipped US$26.3 billion worth of commodities to the U.S., generating a trade surplus of US$16.8 billion. Its leading exports include electrical and electronic equipment, apparel, vegetable oils and fats, and footwear.
The EU, meanwhile, ranked among Indonesia’s top five trade partners, with exports totaling US$17.1 billion in 2024. Non-oil and gas trade posted a growing surplus of US$4.5 billion, driven by palm oil, footwear, and electronics.
Once concluded in September 2025, IEU-CEPA will gradually eliminate tariffs on most Indonesian goods, with duty-free access for crude palm oil and other commodities expected by 2027. This creates a cost advantage over the U.S. market, where many Indonesian exports face tariffs of up to 19%.
However, tapping into the EU’s growth potential comes with its own hurdles. European regulations, particularly the EU Deforestation Regulation (EUDR), demand strict compliance for commodities such as palm oil, coffee, cocoa, and rubber.
While these standards present challenges, they also open opportunities for Indonesian producers to secure access to premium markets that reward sustainability.
